Controlling (12 Business Studies)
Practise chapter-wise MCQs for Class 12 Business Studies — Controlling. Every question comes with the correct answer and an explanation.
TL;DR: Practise chapter-wise MCQs for Class 12 Business Studies — Controlling. Every question comes with the correct answer and an explanation.
Written & reviewed by the Syllab.in Academic Team (CBSE/NCERT subject experts) · Updated
Practise chapter-wise MCQs for Class 12 Business Studies — Controlling. Every question comes with the correct answer and an explanation.
Controlling MCQs with Answers & Explanations
Q1. Which technique of controlling focuses on comparing actual performance with the planned performance at various stages of the activity?
- Management by Exception
- Ratio Analysis
- Break-Even Analysis
- Budgetary Control ✓ (correct)
Explanation: Budgetary control involves comparing actual results with budgetary estimates, which are planned financial targets, at different points in time. This allows for timely identification of deviations.
Q2. When a manager only focuses on significant deviations from the planned performance, which controlling technique is being used?
- Management by Exception ✓ (correct)
- Budgetary Control
- Ratio Analysis
- Standard Costing
Explanation: Management by Exception is a technique where managers concentrate their attention only on those cases where performance deviates significantly from the set standards or plans.
Q3. Which of the following is the primary objective of controlling in management?
- To assign responsibility to employees.
- To ensure that all activities are performed according to plans. ✓ (correct)
- To motivate employees to achieve targets.
- To develop new strategies for the business.
Explanation: Controlling aims to ensure that organizational activities align with the plans and standards set, thereby achieving the desired outcomes.
Q4. Controlling helps in achieving organizational goals by ensuring that:
- Plans are formulated without any regard for their execution.
- Employees work independently without supervision.
- All resources are utilized efficiently and effectively. ✓ (correct)
- Managers make decisions without considering past performance.
Explanation: Effective controlling ensures that resources are used optimally, minimizing wastage and maximizing output, which directly contributes to achieving organizational goals.
Q5. When a company uses statistical methods and variance analysis to identify deviations in production cost from the standard cost, it is using which controlling technique?
- Financial Statement Analysis
- Management by Objectives (MBO)
- Break-Even Analysis
- Standard Costing ✓ (correct)
Explanation: Standard Costing involves predetermining costs for various activities and then comparing the actual costs incurred with these standard costs. Variance analysis helps in identifying and explaining the differences.
Q6. The process of controlling involves setting standards, measuring actual performance, comparing actual with standards, and then taking corrective action. Which of these steps helps in identifying the deviation from the desired outcome?
- Comparing actual performance with standards ✓ (correct)
- Setting performance standards
- Taking corrective action
- Measuring actual performance
Explanation: Comparing actual performance with the set standards is the step where deviations or differences between what was planned and what has actually been achieved are identified.
Q7. Which statement best describes the relationship between planning and controlling?
- Controlling is independent of planning and can be done without it.
- Planning is the basis for controlling, and controlling helps in refining future plans. ✓ (correct)
- Planning focuses on the future, while controlling focuses only on the past.
- Controlling is a one-time activity, while planning is an ongoing process.
Explanation: Planning sets the goals and the path to achieve them, while controlling monitors progress against these plans and provides feedback for future planning. They are inseparable functions.
Q8. The step of 'taking corrective action' in the controlling process involves:
- Ignoring minor deviations and focusing on major ones.
- Rewriting the entire plan if deviations are significant.
- Analyzing the reasons for deviations. ✓ (correct)
- Setting performance targets for employees.
Explanation: Before taking corrective action, it is crucial to analyze the causes of the deviation. This helps in implementing appropriate solutions and preventing recurrence.
Q9. Which ratio would be most useful for a company to assess its ability to meet its short-term obligations?
- Debt-Equity Ratio
- Inventory Turnover Ratio
- Net Profit Ratio
- Current Ratio ✓ (correct)
Explanation: The Current Ratio (Current Assets / Current Liabilities) is a liquidity ratio that measures a company's ability to pay off its short-term liabilities with its short-term assets.
Q10. Which of the following is a limitation of the controlling function?
- It is a backward-looking process.
- It can be costly and time-consuming.
- It can lead to employee resistance.
- All of the above ✓ (correct)
Explanation: Controlling can be expensive due to the need for measurement and analysis. It often looks back at past performance to assess deviations, and employees may resist being constantly monitored, leading to resistance.
More 12 Business Studies MCQs
- Nature and Significance of Management
- Principles of Management
- Business Environment
- Planning
- Organising
- Staffing
🤖 Stuck on any of these? Ask Syllab's free AI Tutor to explain step by step →